E-Signature Legislation Takes Effect

The Electronic Signatures in Global and National Commerce
Act, the legislation allowing the use of “e-signatures” in transactions, took
effect yesterday. The Act gives certain encrypted certificates the same legal
authority as written signatures.

Although e-signature adoption is expected to be relatively
slow, the legislation has been hailed as a step in legitimizing e-business.
“Until you have some measure of legal enforcement for a lot of these
transactions, it really is a risky environment to do business in,” says Michael
Rothman, founder and executive vice president of Shym Technology Inc. (www.shym.com), an encryption infrastructure
vendor.

The encrypted signatures can be used to authorize
documents in areas as diverse as business contracts, health care, and real
estate. Rothman expects e-signatures to gain first adoption in highly regulated
industries.

Most e-signature implementations are expected to use
Public Key Infrastructure (PKI), the same technology used for authenticating
credit card transactions over the web. Although PKI has been in use for some
time, the bill is expected to extend the reach of the technology.

The bill has not specified PKI as the preferred technology
for e-signatures, but Rothman says that there is general consensus within the
security industry that PKI is the most practical means to take advantage of the
law.

The passage of the e-signature legislation signals an
attitude shift by the US government regarding encryption. In the past, the
government has been reluctant to nurture encryption technologies, citing law
enforcement and foreign espionage as concerns regarding encryption policy. – Christopher McConnell